Abstract

Despite its recent economic successes, India continues to have a vast underclass where children do not go to school or are forced to drop out early. In this paper, I describe a new plan to attract “for profit” private sector investment into the education of our poorest and most vulnerable children who, given current realities, are unlikely to make their way out of the poverty trap anytime soon.

The idea is radical but at its core the plan is simple. Recognising that the private sector can work wonders when there is a profit motive involved, this paper proposes that the Indian government should invite them to set up quality schools for India’s poorest with the incentive that as when these children grow up and start earning their livelihood, the income tax they pay to the federal government over their lifetime would go to the entity that nurtured and educated them.

The financial viability of the model under Indian conditions is considered at Appendix A (pp.12-17). Appendix B describes a workable mode—with returns to investors captured from future income tax payments—to attract corporate investment in financing college education for talented, but poor, American students.

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